Bhopal, India and Union Carbide: The Second Tragedy Author(s): R. Clayton Trotter, Susan G.

Day and Amy E. Love Reviewed work(s): Source: Journal of Business Ethics, Vol. 8, No. 6 (Jun., 1989), pp. 439-454 Published by: Springer Stable URL: http://www.jstor.org/stable/25071921 . Accessed: 24/05/2012 01:18
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Bhopal, India andUnion Carbide: The Second Tragedy

R.

Trotter Clayton Susan G. Day E. Love Amy

ABSTRACT. The

paper examines the legal, ethical, and issues involved in the Union Carbide gas leak public policy in India which caused the deaths of over 3000 people and injury to thousands of people. The paper begins with a in historical perspective on the operating environment
the accident, then internal discusses strengths examining

and weaknesses,

and

external

opportunities

and

threats

faced

by Union
discussion

Carbide at the time of the accident. There

of management of the various interests

is a

involved

in international public relations and ethical issues. A review of the financial ratio analysis of the company prior and
subsequent to the accident follows, then an examination of

the events Bhopal, surrounding an international situation audit

the second tragedy of Bhopal ?

international victims paper to system legal of the accident. concludes with

the tragic failure of the

and timely com

adequately

pensate

Clayton Trotter is a graduate of theUniversity of Texas School of Law and College of Business Administration. Currently, he teaches in both theCollege ofBusiness and theSchool ofLaw at Texas Tech University; and wasformerly Associate Professor of Law at theCoburn School of Law inVirginia Beach, Virginia.
He has national Mr. Trotter taught Business courses in Real Estate Law, Transactions, of and Business Corporations, Law. of contested Inter

The

recommendations

towards

as a call for public policy, congressional action U.S. international of based multinational safety regarding as well
operations.

Introduction
civil

? and

The

worst

industrial civil lawsuit in

has been attorney

record in a number

accident

the

cases and has appeared in theFifth and Seventh United States Circuit Court ofAppeals on such cases. He is licensed inTexas, Florida and theSupremeCourt of the United States. He has authored a number of articles on business related legal
matters. Susan G. Day a is a Texas Real Estate Broker, Escrow Agent, and

largest

history
In the late 1920s, Union Carbide Corporation began in India. At the time, India was still a operations vassal state of the British Empire, Mahatma Gandhi was for Indian pushing view on India's Churchill's as: "I am quite satisfied with don't want them disturbed statehood, and Winston was independence quoted on India, and I views my by any bloody Indians".1 not want their views on

InsuranceAgent. She graduatedfrom Texas Tech University

with major in Business She Administration attends with Texas an Tech emphasis University on Management. a pursuing graduate Susan is Past President Texas and Tech currently in Education. degree the Toastmasters of giving Susan

International and

University

law. In addition,

speeches is a member

group at lectures on real estate of the following as

Many

sociationsat Texas Tech University: Society Advancement for of

Tech Asso Association, Management, Marketing Management Secretaries Association, National Asso ciation, Lubbock Legal ciation Female Executives and the Association. Ex-Students for

people today might and with all due respect to Mr. disturbed, Bhopal in of the fact that a number of Churchill, light on the matter,2 one articles have been written might four years say that there is no need to re-examine after the occurrence of the deaths of over 3 000

Amy E. Love graduatedMagna Cum Laude inDecember, 1988 with a Bachelor of Business Administration Manage degree in ment Texas Her Tech from University. long range goals include graduate schoolwhere shewould like to emphasize finance. Amy is a member of the Societyfor Advancement ofManagement, Golden Key National Honor Society, Gamma Sigma Honor Society, andPhi BetaKappa Honor Society.

to hundreds of thousands, the people and the injury Union Carbide in methyl isocyanate gas leak Bhopal, one India. When the disaster, and begins discussing international of a of this tragedy legal relationships

magnitude,

the human mind finds it difficult to

less understand the complexities of imagine, much the incident. Because of the intricacies of the issues,

1989. Journal ofBusiness Ethics 8:439-454, ? 1989Kluwer Academic Publishers.Printed in the Netherlands.

440 et al. Clayton Trotter the singular enormity of the tragedy, and the value of human that life, the authors have been persuaded a review of Bhopal four years after the accident is in events not order. Recent in the discussed previously such as the of the literature, upgrading charges of the Board, Warren E. against former Chair to murder,3 from and the Anderson, man-slaughter at the riots which on the fourth occurred plant the anniversary of the disaster4 further substantiate a reconsideration for of the chemical holo necessity as the late United caust. States District Perhaps,, H. Wood, say "it all Jr. used to jokingly Judge, John on whose ox is that depends being gored"5 meaning the bottom line is all that any stakeholder in modern business is concerned be with, they corporation, or investors. The pur union, government, private pose of this the article is to underscore the second inter tragedy, national of those glaring inadequacies dispute resolution processes of modern To maintain Carbide was its forced license in India, Union operating a second to plant begin building was 1977. Before construction substantial problems appeared, 1978. modifiations during was considered operational.13

in Bhopal during in 1979, finalized resulting 1980, By

in construction

the plant to 5 000 tons of Sevin per produce designed Though never at the year, operated capacity.14 plant were discovered. In 1982, ten deficiencies safety and 1984, various stages of shutdown Through were two of the evidenced; yet partial operation The two remain uncorrected. had for a devices gone unrepaired ing faulty safety two year period of time and apparently management to be of con did not consider the problem primary deficiencies remained cern. The continued refrigeration to malfunction. to cool MIC designed in However, June 1984, of Union Carbide was told that unit

and the failure

can be said that such systems, if it systems to a solution to the issues exist, adequately develop of a of this tragedy magnitude.

un and safety deficiencies in 1982 had been "rectified".15 On Bhopal a pressure was the date of the accident, gauge on Tank 610, it possible missing evidently making to enter the tank, mix for water exothermically,16 and form a toxic gas. most covered at in 1984, Warren the Chair of the Anderson, and top of Union Carbide Corporation, a to to endorsed sell the management plan plant due In October, its underutilization.18 Carbide 1984, executives its announced investments in expanding other lines of business ? petrochemicals, industrial consumer and carbon products, pro gases, metal services and and ducts, specialty pro technological two ducts.19 Just as a new year was starting with Early Board17 strong quarters
aster occurred.20

the headquarters of the equipment

Historical

perspective

In 1969, Union Carbide India, Ltd. (UCIL) and

Union ment Corporation agreed with the govern a to of India build pesticide manufacturing in this plant was Bhopal.6 Originally, plant designed to combine and intermediate chemicals package thereby producing constituents of the the end mildly and methyl diluted with Sevin.7 The pesticide, toxic pesticide Sevin, Carbide

were (MIC) isocyanate alpha-naphthol to be combined, non-toxic powder, and at the In where India, Bhopal plant.8 packaged are viewed as a miracle,9 Union Carbide pesticides demonstrated both and sophisticated technology to the of there India, export potential government was fore, the Union Carbide Corporation permitted to own 50.9 percent of Union Carbide India, Ltd. the Bhopal plant, and the which owned remaining 49.1 percent was distributed Indian share among holders.10 Fifty and nine-tenths percent of its stock is owned owned Indian Union Carbide Corporation, by or controlled the government by citizens.11 Union Carbide under 22% of is India,

for Union

Carbide,

the Bhopal

dis

was

the evening of December 3, 1984, the plant was below far capacity and operating partially An operator noticed shutdown for maintenance.21

On

that the pressure in one of the "MIC storage tanks read ten pounds per square inch ? four times nor as he assumed mal".22 The operator was unconcerned been "pressurized with nitrogen" by the "previous shift" and around mid personnel their eyes had noticed night several workers begun a chemical a to "water and sting", signal indicating soon found; however, leak.23 The small leak was leaks at this plant there was little concern as minor on were and "itwas time common, retired to the company canteen, the problem afterwards".24 for tea and the crew resolving to correct the tank had

and the balance is held by approximately 23 500

corporation incorporated of New York.12 is a Corporation the laws of the State

Bhopal, India and Union Carbide in the MIC tank forced a Finally, the pressure seen relief valve open and poisonous gas could be one hundred twenty feet into the air.25 escaping Apparently and during winter, and because ponents of MIC were heavier than air, the gas drifted to the Gas leaked for down neighboring villages. an minutes from tank and forty underground a covered square mile area.26 twenty-five within the gas spread, weak and elderly people died moments. trains were diverted, Incoming means the most of escape. The effective halting affluent fled in their cars.27 Approximately half of victims of the worst industrial accident as saying:
so

441 inhabitants would have some

one-third The the

of the city's Indian

debilitating injury.
license the cancelled government operating to the after Bhopal plant immediately to a new rise accident.37 The accident gives issued of foreign "will never be the same" and their costs of could increase due to accidents the potential in companies risks of operations of countries. Their

because

the accident

occurred

after dusk com the chemical

definition multinational operations overseas

operations

As

of this magnitude.38 "The Attorney General of India . . .vowed to sue . ."39because court. in an American Union Carbide Indian plaintiffs. courts are a less viable laws require alternative Indian the plaintiff to the to pay a

the 1000000 inhabitants of Bhopal fled on foot,28

in history. of Bhopal was quoted
I have cats, seen whole chemical families

very high filing fee to begin the legal process,40and

to date, there has yet to be a death judg wrongful more ment in India of than $40000.41 Because not exist in Indian punitive damages apparently do lawsuits, Union Carbide would clearly benefit from a trial held in an Indian court even economic though death judg damages could be the same.42Wrongful to ments often amount to a few rupees.43 According the Minister of India, two years after the accident the Indian government temporary apparently made benefit for a "measly" $766 per payments family of those who died in the disaster, and $115 per family

The Mayor
I can quiet.

say that Goats,

warfare. ?

Everything father, mother,

children ?
totally intact.

all lying silent and still. And every structure

I hope never again to see it.29

Indira Gandhi's

assassination

occurred

in October

1984, and the month-old son, Rajiv Gandhi was crisis.30 Decisions victims manent of

headed by her government a faced with devastating were made which would affect the

received per the Bhopal gas leak who as burned lungs, charred eyes, injuries such or nervous the systems. Doctors predicted damaged and would experience "sterility, kidney population liver infections, vision and

of those injured.44 In an attempt to protect its interest, the Govern ment of India found it necessary to secure the best a firm representation they could find45 by specializ mass disaster cases46 in and ing liability product not to mur cases.47 "Culpable homicide amounting and death by negligence, mischief, der, causing or mischief cattle, maiming by killing negligent conduct with substances, and respect to poisonous ex were filed criminal conspiracy" against charges ecutives of the Union Carbide Corporation.48 Union Carbide was faced with to some lawsuits, according in amounts billion dollars, $35 estimates, exceeding far in excess of its corporate net worth.49

tuberculosis, problems in the short run, while the potential damage", effects were for birth defects and other long-term to there yet to be known.31 While dispute, subject to occur were reports that stillbirths were beginning and fetuses were being aborted.32 the city began to Three days after the accident, move in Bhopal was toward stability. The plant closed and locked,33 and remains closed at this time. and Fertilizers of Chemical The Indian Minister brain to of Corporation failing States plants the safety standards of United provide to the Indian that could everything plant.34 Nearly at 2 998 To least did.35 have gone wrong date, people have been killed as a result of the gas, and over accused Union Carbide 300 000 have received had By comparison, one million Texas, a city of approximately Antonio, to the be the dead would equal people, roughly a and of approximately population large high school, injuries.36 this accident occurred in San

International

situation

audit

the During and external

examination

of Union

Carbide's

internal

internal the following environments, and external opportun strengths and weaknesses, ities and threats seem to be in strategically important the analysis and interpretation of the company's

et al. 442 Clayton Trotter international accident. Union Carbide's apparent weakness of the Bhopal plant, which was poor man have arisen to sell the legal predicament with respect to the Internal weakness

Internal

agement from a strengths

strategic management

may decision

plant. In an effort Carbide's relevant to this allowed

Two

of Union

tragedy pesticides

include

strengths its admirable in the safety record its tremendous financial industry,50 and credibility concerns. and is derived Third world one-half three-fourths from coun of of

stability.51 Union Carbide's reputation tries account known known Union for

its the the

to decrease expenses, management to deteriorate, the plant and equipment attrition among and employees allowing qualified a entrance in standards lack lowered of resulting seems to have led to the which qualified applicants,60 greater potential for accidents. Inwhat appears extensive to be efforts cost-cutting to forestall efforts a were economic imple de

safety for approximately cases,

to company publications, is well known for its Carbide Corporation on aworldwide to adherence level safety standards53 and maintenance of an accident record substantially below the industry average. In 1983, the chemical as a whole had a which industry safety record 100 showed 5.2 reported occupational injuries per for The all full-time workers. average reported firms, in injuries per occupational At the time of the accident, Union general, 100 workers.54 was 9.7 reported Cor in

poisoning deaths.52 According

failure, mented cline efforts workers.

by management,61 in standards. Most was The the

causing

significant

important substantial reduction twelve to six

these among in qualified

shift was

original decreased

operators assigned per and the work force

dropped from a high of 1500 to 950 people,62 yet

a still remaining major provider of job.63 American to senior managers and junior executives, licensed for fixed periods of rime, only the company's standards, perhaps resenting falling left the plant prior to 1982.64 Job entrance require ments were lowered and several training programs India were college eliminated.65 degrees Jobs which were reduced previously required in classification and remain in

manufacturing

Carbide

poration the United Chemical. The

was

the third largest chemical DuPont States, following less

producer and Dow than

filled by high school graduates with

three previous work-related A lack of qualified ment have experience.66

little or no

Bhopal plant represented Carbide's worldwide percent (3%) of Union profit, and less than two percent (2%) of the corporation's was not net income. The important plant critically to Union income Carbide's from

overall operations and any loss of not affect the com the plant would At time of the accident, the status.55 financial pany's was $10.5 billion Union Carbide's financial strength in assets,56 and by employed reduced as Union approximately the firm.57 This Carbide 98 000 figure spent $4.3 billion were people has since been on a

and poor manage personnel to the led for employee may potential of the Bhopal plant claims an sabotage. Management tried to "spoil a may have deliberately employee 610.67 The batch of the chemical" inside Tank Manual for Operators clearly emphasizes:

Training "

'KEEP WATER AWAY FROM MIC

"68 Union
to the

further claims "a water Carbide tank was found and concealed

connection

and has sold and stock buy-backs, special dividend $3.5 billion worth of assets in an attempt to prevent a The takeover bid from GAP Corporation.58 hostile divisions of Eveready Batteries, Glad profit making were Prestone and Anti-freeze sold, losing Bags annual revenues of $6.9 billion, one-third of its 1981 is now twice its former level, and stands peak. Debt at 63% of been capital. The number of employees has reduced to 43 000.59

supervisors on the back of the notes supervisor's daily layout Union the of Carbide suggests possibility sabotage.70 a pressure were contends gauge missing log data and

and by operators on the third shift".69 A sketch of the tank

the accident. Management claims water following at least "21 tons of MIC" entered Tank 610, with and carbon reacted inside, exothermically, "generated increased pressure in the tank caus dioxide", which to that ing the gas escape.71 Union Carbide concludes several employees attempted to cover-up significant

and Union Carbide Bhopal, India of efforts the accident.72 those Evidendy, contributed Carbide the potential cost to for include

443 a lack of safety standards, as well as a lack of protection, quali and the lack of literacy in the Indian of was forced to to agree to strict

knowledge cutting

lax enforcement

causing unsafe
sabotage.

Union by conditions or created

environmental fied personnel,

population. Union Carbide opportunities opportunities the company for Union to India Carbide in the first

External The which

pertinent attracted

still exist today include: the need place, and which in India,73 the transportation for pesticides system located near the plant,74 the host country's demand and services, and the attractive labor in the Third World market country. creates a The enormous Indian population great Carbide's and has demand for Union pesticides, to become the caused India's pesticide industry in Previous second Asia, following Japan.75 largest save 10% of the state that estimations pesticides for their goods available crop in India, which over 70 million cating hunger for quarters of the Indian population annual food for their livelihood,77 equates to eradi people.76 Three

prior licensing requirements in India,82 however, license ing and meagerly trol agencies are small, underfinanced, more is "Even citizens.83 damaging by represented to the laws. local enforce officials the reluctance of to enforce the laws, no the political will Without can amount of improve India's environ legislation situation".84 mental a to a lack of land use control measures, Due of Indian citizens were "shantytown"85 the around plant site. Apparendy, develop its location was out when the plant was sanctioned, side the limits of the city, but by the time production a a had developed, making large large colony began, to emittents from number of individuals vulnerable colony allowed or to in industries.86 of pesticides the production An additional threat was the lack of qualified be the individuals plant and equipment operating were to leave the country as cause "expected they no were soon as last they longer needed".87 The States technician left in 1982 after his tour as United ended.88 From the renewal of its Plant Manager in 1982, the date the plant was license through 6, 1984, the Indian government closed, December or to technicians allowed no American engineers work within the plant.89 Prior to 1982, American were licensed by the Indian government engineers in India, for short perods of time.90 While working were to train Indian Americans replace expected
ments.91

an operat obtaining con environmental

on solely depend Indian thus many agriculture such an farmers are dependent upon pesticides78 Sevin produced Union Carbide. This continuing by some demand for Union Carbide's products gives to the company in the interna leverage handling tional that leverage However, legal predicament. an not solve but does the problem, incentive to gives an equitable solution. seeking Union Carbide's greatest opportunity in prevent the from the disaster company was ing destroying in India, a Third the fact that the occurred tragedy in the World country;79 had the accident occurred States in a city of comparable United size (i.e. San Antonio, Texas) the company would probably have been destroyed and punitive by litigation. Exemplary are in Indian lawsuits,80 allowed rarely damages therefore, Union Carbide could benefit greatly from held by a court in India, rather legal proceedings States. Nevertheless, than by a court in the United consume unless settled, the Bhopal litigation will resources for many years lution of the matter.81 to come before final reso

is difficult via mass communication Information to distribute to the Indian the because population are the of Indians poor farmers.92 Educating majority Indian people is an arduous task as they do not view as a to education priority.93 These problems proved be in the plan of strategic management significant action for the Union Carbide subsidiary. in India, environment In essence, the operating was in for various reasons, inadequate woefully terms of controls safety, land use, and environmental to prevent the disaster four years ago. Apparently since the disaster. In the changed we are to rules and accustomed States, con and environmental regulations regarding safety has not

External

threats Carbide's external threats

nothing United significant

Many

of Union

et al. 444 Clayton Trotter are more and, in the strictly enforced of some, enforced, even to the opinion overzealously cost of prohibitive. Government degree being totally like the EPA, OSHA, and a FDA, HEW, agencies trol which structures to of other regulatory designed in which its the wisdom has protect public Congress into and which Americans take for brought being, all the while exist their about granted, complaining form in ence, simply do not exist in any effective Countries. many Third World panoply all strengths, weaknesses, weighing ities and threats of the Union Carbide In opportun ? Bhopal threats, and International interests "If it works, commonly existence managed at least don't held it" is a management maxim and Union Carbide's continued fix that they have successfully interests to their benefit public relations managing

is evidence to remain

their international enough

in existence.

A complex environment the value systems solutions consistent with Finding States and public attitudes of India and the United was, Union local and many court in and laws, regulations, jurisdictions foreign the aftermath of the The company's tragedy.104 success on its to cope with continued ability depends this network of interrelated government policies.105 a fam Clearly, Union Carbide needed "thorough currents in and key politicians" iliarity with political States if itwas to in India, and in the United Bhopal, weather the storm produced by the chemical leak.106 with governments "A host with. ence, control, of a company The companies as influential must consider their host institutions to be reckoned and is, the "crux of Union is involved Carbide Carbide's dilemma".103

it is evident that the external tragedy, internal weaknesses far the company's outweighed in Therefore, strengths and opportunities. hindsight, these difficulties contributed obviously significantly even more to the Bhopal tragedy. However, signifi cant is the fact that the situation audit would be the same today because nothing has changed as a consequence of the Bhopal Further tragedy. a to the be disaster more, appear legal complications or of equal greater proportions. almost Evidently, Union Carbide has emerged unscathed from the the lingering dilemma tragedy, except for of unresolved is lawsuits. The "New Union Carbide" current its organization.94 The slowly rebuilding to grow from is CEO, Robert Kennedy, attempting within and become the needed for a come catalyst Mr. back.95 has revamped his organization Kennedy a in an attempt to cut fat, eliminate stifling bureau not and "boost cracy, improve efficiency, necessarily a "new at is profits".96 Kennedy attempting spirit" strains financial of the the Carbide, despite Bhopal
accident.97

Multinational

to influ has the power government or over the take operations completely on its soil".107 operating must international companies complex web is extremely problematic. "The busi

operate within

Union poration unaffected worth million a big

Carbide with

considerable

liability

for Bhopal and about $200 set aside, Carbide no fears longer size of the But ultimate hit. the earnings remains in doubt".98 India is still India ? a in reserves from rich remarkably heritage in with problems staggering are still lax and courts Regulations recognize enviromental vultures to to serious crimes a the the are

of

by insurance

cor is still a major international financial strength, largely "With $200 million this disaster.

indi ness-government-society applies relationship . . ." located to each in every subsidiary vidually as the parent as well corporation. foreign country, must firm "Each multinational appropriate develop with these com for and policies strategies working Investment the home jurisdic beyond plexities".108 "more than a step across a tion ismuch geographic across different cultural line";109 it is a quantum leap milieus. at its A company ignores this cultural reality must act of within laws The the the company peril. must be considered nation, and its behavior accept able and safe by

country with past, burdened present.99 still unwilling violations of The citizens

Where

involving

are still considered

regulations.100 Lawyers ambulances.101 following still suffer.102 And, similar happen.

of Bhopal accidents may be waiting

in the affected groups society. two or social, systems of political religious, as occurs between the United nations vary widely, of States and India, managers of local subsidiaries a choice faced with be multinational enterprises may to the parent company or maintain between loyalty ing cultural values.110

Bhopal, India and Union Carbide The company's interests Car from the financial ramifications, Union a desire, with bide's management expressed along many observers, that a "quick and fair settlement of serve the the claims of the victims would legal needs far better than company's [Union Carbide's] Aside and expensive prolonged litigation",111 and a thors believe this should be considered public Several issues were relations necessity. raised that for the chemical affect the public policy relationship Procedures industry worldwide.112 in a investment and operations necessary this magnitude. foreign are foreign country and should be in place prior to a of tragedy regarding the au their corneas,

445 and their

to sensitive eyes remain a or must walk mile more, and stand light.115 Victims a less in line for hours, for the of privilege seeing services promised than competent doctor.116 Medical The poor are now poorer than

have not materialized.

ever.

Indian government has taken an active role to resolve the issues, even attempting though they for the accident.117 The may be partially responsible Indian government failed in its efforts to have the cases handled in the United States, and is now faced The in with the administration of justice in India concern amount of ing the claims of the injured parties. The is in reduced value because of recovery substantially cultural differences the of life and value regarding injuries.

The public's interests a workable wants to find business public between industrial production and nature's or to prevent limits", to act "quickly and openly The complexity and alleviate human suffering".113 seriousness of social structures limits the ability, "The of any single organization skills, and effectiveness to operate American the The public, effectively. an com interest in American authors believe, have panies maintaining with other nations. international workable relations it or not, Union Carbide is a an ambassador, of the United States Like and is the manner accordingly will affect the governed States as a of the United or negatively. ambassadors for the United Union Car

balance

The distinction in damage awards, therefore, should be explained in terms of the cultural and social standards of the two countries and not in terms of [legal] doctrinal differences. The Indian victims can fairly and justly be
in compensated cultural standards lives. India has their that standards own country ordinarily of living, according affect their wealth, to the everyday and

values,

beliefs that are vastly different from those in the United

States.118

Multinational The about called

interests concern worldwide

representative, to the rest of the world, in which public whole, this matter relations either

leak of MIC a variety for an

gas generated

of issues. Union Carbide long-term immediate worldwide ban on the

image

positively bide, being international States, at present, are "Ugly

sador.

American"

the image of the portraying rather than a responsible ambas

and shipment of poisonous material.119 production At the Woodbine, Carbide plant, Union Georgia to make Temik, continues MIC using shipments that were turned away from ports in Brazil and
France.120

The Brazilian and Sao Paulo duction of MIC

state banned

governments

India's interests its society have experienced in major difficulties coping with the problems posed . . . and nowhere modern international business by can that be seen more than in Bhopal, where the worst industrial accident"114 tragedy of the "world's 10 000? inhabitants, lingers today. Many possibly on 20 000 ulcers eye injuries, including experienced As a whole, India and

shipment, after the Bhopal accident.121 Several to Union the French companies, including subsidiary are of Carbide, pesti investigating ways producing cides without using MIC.122 Any further manufac ture of MIC Carbide was halted, both at by Union its and sister Vir Bhopal, plant in Institute, West Carbide's chemical ginia.123 Union plant in West was bombed Germany by terrorists three days after the accident.124 these interna Bhopal Throughout tional incidents, the company claimed itwas a victim

of Rio de Janeiro storage, and pro

et al. 446 Clayton Trotter of circumstances In and sabotage.125 the formal announcement of 1985, Union that due to it was 1986 1985 1984

TABLE I
Financial ratio analysis

Carbide made a decline in planning

profitability retrenchment.126

its subsidiaries,

all the immediate furor over the accident, Despite there do not appear to be any major multinational term resolution treaties of these arising for long
issues.

Liquidity
Current Quick Activity turnover Inventory Aver, collection 8.50 Times 6.50 Times 6.15 Times ratio ratio 1.28 Times 0.89 Times 1.43 Times 0.94 Times 1.88 Times 1.00 Times

Financial

ratio

analysis

period
Fixed Total asset turnover asset turnover receivable

61.58

Days 1.45 Days

65.93 Days 1.34 Times 0.76 Times

57.25 Days 1.49 Times 0.90 Times

0.84 Times

. . . as the is inescapable"127 just was. to International business need gas strategies not include but also social only business goals. a greater chance of "Corporate strategic planning has the tends to accept success",128 and the public "The conclusion
corporation, when business executives are aware of

Accounts turnover Leverage ratio Debt

5.84 Times

5.46 Times

6.29 Times

86.70% *653.30%

91.90% 114.00%

53.00% 114.00%

Debt-to-equity

they is social abil the operate. "Corporate responsiveness to interact and impact with the sur ity positively is environment".130 Environmental rounding analysis an Cen tool of strategic management. indispensable tral management the competing firm's authors
balance

the

"broad

social

environment"129

in which

Profitability
Gross Net profit margin 31.50% 7.80% 29.40% 29.50% 3.40% profit margin on invest Return ment Return * on equity

( 8.08%) ( 6.70%) (83.40%)

Treasury Stock

6.60% *49.40%

3.10% 6.60%

should demands

"strike a balance of stakeholders

between and the the to strike a of

Increase

due

to

purchase

of

in the amount

of $2.222 million.

profit-seeking questions
ever occurs.

goals"131 although whether any efforts

one

(134)

International strategies The reactive

legal

and management

the Bhopal accident, Sevin was considered insecti the # 1 selling insecticide.132 The worldwide was Union Carbide cide market sluggish133 and a decline in 1984. for profits predicted in its Union successful Carbide was restoring to their confidence stockholders' by responding Until concerns The tant to regarding following the disaster. Financial financial is impor Ratio Analysis made by the distinguish changes company from 1984 to 1986. In the aftermath of the disaster, Union Carbide's fell.135 During 1985, the company was a hostile to prevent stock repurchase In GAF the takeover by 1985, Union Corporation.136 suffered a $581 million Carbide loss, restructured forced stock price to of majority However, company by long-term. recorded its largest net income 1986, the corporation ever and seems to have weathered the crisis.137 their assets, increased debts became and debt. The

and shipment of poisonous production This measure was taken to ensure safety at their were processes plants fully operational to the worldwide but while that the public disclosing chemical was not essential to the production of the chemicals. main of fear product of the plant.138 In the wake the disaster,139 the company's public rela following tions strategy stressed the industry's excellent safety in an attempt record and efficient safety procedures to overcome the poor publicity the company was receiving from the tragic acccident. While United admit neither Union nor Union Carbide States, Union "legal" guilt, admitted "moral" guilt.140 For this reason, in the Corporation will Carbide Ltd. India, Ltd. Carbide had India, the com

covering to worldwide

Carbide after dis strategy of Union the accident was to call an immediate halt

Bhopal, India and Union Carbide a to the accident was pany decided quick response in three phases: necessary and should be done * * * Immediate Intermediate Long-term Union trips to responses, responses, relief efforts. immediate medical and impression being was

447 created about that the company was not cause or the the accident's

forthright

unlike that atmosphere, in the United advanced States, the industrially in encountered company great difficulty managing Union the crisis. With vital information missing, found included Carbide Officials members about found itself vulnerable Carbide relief teams, offer of Union to public criticism.149 to to refused speak cautious overly the realm of outside

company's accountability".148 In this thin information

Carbide's

relief efforts

Bhopal, sending to the contributions Fund, and Bhopal Relief ing and equipment. medicine supplying needs these steps, the intermediate Following were handled the firm's Employee Relief through and additional medical Fund, a Bhopal Eye Center supplies. The Victims'Relief The meeting to the $1 million company contributed Fund.141 aimed toward relief efforts were long-term needs of the survivors. health and welfare

of the media

and became

the accident discussing In the the the company. days immediately following Warren with the Anderson lost crisis, credibility Car the public.150 Union and subsequently media, bide was viewed mation, as to disclose valuable infor failing to handle a crisis with instead of attempting

Union Carbide offered to build dwellings, job train

The company began to plan ing centers, and schools. to correct the deficiencies. safety a After seventeen years without reported incident, to admit to Union forced Carbide officials were several other to similar in Institute, West at its occurring plant admitted The company Virginia.142 incidents at its "relatively harmless" incidents forced the com accidents, carelessness" in its domestic opera

for its life. Claims were fought in court. In addition, the company stonewalled for its action, appar refused to accept responsibility its insurance carrier. The ently under the guidance of cases went victims' all the way to the unsuccessfully Supreme Court of the United States.152

dignity.151 The company

twenty-eight various plants.143 These pany

tions.144

Legal responsibility
Union when claims Carbide the United

- the second tragedy

to "concede Carbide

won its greatest victory Corporation States Supreme Court held that the

a level of to generate attempted in the the public respect days immediately following a disaster by "reactive" crisis manage implementing ment concern that plan portrayed genuine company for the victims. "Warren Anderson flew to India Union within hours of the accident" and "made himself available to hundreds of reporters".145 He stated, "this is a responsible to do the and we want company our share of Bhopal, right thing for the people holders and our employees".146 Lack of reliable information and communication networks Carbide's management hampered Union in its attempt to the crisis; vital effectively manage or withheld.147 information was missing "Because the so accident occurred far from company headquarters was in Connecticut and because communication

of the victims would not be heard in United on the of forum non-conve grounds niens.153 Forum non-conveniens refers to the dis a court to of decline jurisdiction cretionary power of if, in the interest of justice, and the convenience the parties, the court considers that the case should in another court or In this proceed jurisdiction.154 almost all of the the case, witnesses, injured parties, the physical evidence, and the social impact of the accident were all in India, therefore, the applying non-conveniens doctrine of forum the court held the case should be tried in India. This is such a States Courts victory for Union Carbide because for injuries which been compensation in the United obtained the for States, compensation compared could have to the

injurieswhich might be obtained in Indiawill be a

mere death pittance.155 "There has not judgment for the victims in India of more argue a wrongful than $40 000"156 ? and that bigger been

very difficult due in part to the chaos and confusion caused by the accident, the company tended to be in its relations with the media. An overly cautious

Lawyers

et al. 448 Clayton Trotter in American courts, as given in mass-disaster experienced juries judging in effect, sent back to India cases.157 The cases were, awards are for trial. the Indian Concerning interim order was entered interim proceedings, by Judge M. an original K. Deo in swifter ? are or wild is animals. The owner involving domestic held liable if the animal, be it bear or bull, escapes or and does personal property damage. The injury the strict of of doctrine history liability for abnor activities or ultra-hazar and mally dangerous things is known as dous activities seems to begin with what v. the rule in Rylands Fletcher.165 water coal a In the constructed Rylands case, the defendant reservoir on their land which was situated in a an through which was

Bhopal, India in 1987 awarding $270 million for

relief, but this was reduced to $192 million an 1988, in accordance with April Appellate S. K. Seth of the Order entered by Judge Madhya Pradesh state appellate court.158 Surprisingly, Judge in Seth apparently removed Judge Deo from the case after affirming Judge Deo's decision.159 The removal in the middle of Judge Deo which of occurred October, Carbide Deo's 1988, is another affect Corporation removal will for the Union victory ... if "but it was not known the interim

water region. The escaped mining shaft to an active mine abandoned mine flooded causing owner was held
the doctrine that

loss. The land defendant great liable. The case appeared to settle
a non-natural, abnormal, extra

relief".160 So, is still apparently, four years after the accident, there no victims the of financial relief accorded certainty of the disaster. Deo believes Union Carbide Judge or he would not liable for the accident, Corporation have interim granted damages. The plaintiff, Union of India, on behalf of the victims,
The duty caused

or ultra-hazardous create a activity would ordinary the owner of the situation, if injury occurred, where be held strictly liable for damages.166 land would in at least three American Apparently, jurisdictions, the doctrine has been applied to situations involving the emission located within More of a smoke or toxic gases area.167 and Keeton by a factory populated recently, Prosser

in its
enterprise to the to

pleadings
owed

stated:
an absolute to account assure of and that the non-delegatable was no harm hazardous and

out that point 2nd applies strict liability a activity undertaken by is one which such activity defendant: necessarily 'cannot be involves a 'risk of serious harm' which the Restatement of Torts in tort to: "ultrahazardous eliminated is quite liability injuries by the exercise of the utmost care' ".168

community on anyone

inherently dangerous
taken.161

nature of the activity it had under

The basic legal concept cited by the IndianJudges

similar to that found in American law. Strict in tort is used most often in situations where

The Appellate Court 0udge Seth) cited,with ap

of the Supreme court of India in proval, M. C. Mehta's Case involving a "much less dangerous the oleum gas", while chemical substance namely an ultra-hazardous suit of involved escape "Bhopal chemical substance namely Methyl-Isocyanate".162 the decision law is the basis for American law, as well English as the basis of Indian law. At the common law, the which the Indian court apparendy tried theory upon to allow recovery would be termed strict liability in
tort.163

en result from an ultra-hazardous activity or the a party with (i.e. blasting by dynamite gaged or in situations of animals), keeping dangerous an is placed where product unreasonably dangerous someone on the market a manufacturer is and by use of the Since the the product. injured through and party to be held strictly liable has exclusive or absolute control of the production the process in the party does activity, injured by the product not need to prove that the but merely negligence, on the market an defendant placed unreasonably dangerous hazardous
damages

law apparently applied The early English common a strict rule supported by "undoubtedly liability type the feeling in law that he who breaks must pay".164 a move in the law to later appeared While strong never fault or neglig impose any liability without ence, the doctrine of strict liability is still very much a part of our jurisprudence. has been The doctrine long applied to cases

product in nature
as a result.169

or

that

and

the activity was ultra that the plaintiff suffered

Strict liability in tort would

recovery even in the event that that a employee gruntled" There have been cases where a defendant owner to an

probably permit
there was was a "dis "sabotage". entrusted by to walk, and

committed dog

employee

Union Carbide Bhopal, India and released the employee intentionally during the walk, of the dog to attack the plaintiff. The intervention not act of the employee did the intentional preclude recovery against the owner of the dog.170 The party that has exclusive control over hiring and staffing of an ultra-hazardous is and if an activity responsible, ? was innocent third party the party is liable injured, not because of fault or but due to the negligence, nature of the ultra-hazardous activity. Union Carbide Corporation could be held direcdy liable to one of the injured third parties if the court was a sham or that the Indian corporation holds of the parent (i.e. it had no independent alter-ego or existence this has been authority.) Apparently, held by the Indian courts, and will ultimately make verdicts Union Carbide directly liable for whatever
are awarded.171

449

and loved ones dev only have the loss of family astated the survivors, but their livelihood has been to remain closed,178 removed as the plant continues and litigation drags on. Will corporate responsibility this the courts will decide be established? Perhaps, . issue . . within another four years.

Public While

relations an accident

recommendation of Bhopal was of the magnitude of unforseeable by the management

probably totally Union accidents of some degree of magni Carbide, manu are tude by all chemical clearly foreseeable disaster may be facturers. Accordingly, the Bhopal considered an crisis management and immediately

Union also have or concentrate

Carbide been near

and the Indian government may to for people allowing negligent

the plant. No responsible corpora tion should allow any group of government on the to congregate private property of the people have a "vacant zone", Each should corporation. plant a the number of miles between whereby designated nearest exists.172 plant and the village What has been termed "The Iron Law of Respon states that in the who do long run, "those sibility" not use power in ways that society considers respon not a While tend to lose it".173 sible, will legal it seems to apply in this case. Apparently, doctrine has been avoided the Iron Law of Responsibility not certain em Union Carbide, but perhaps by by ployees. On November of Bhopal, 16, 1988, the magistrate for the arrest of the former India issued a warrant and two Chair of the Board, Warren Anderson, company charges officials mentioned and manslaughter were previously claims the increased the and other to Indian

of ineffective exceptional example and poor media relations, during the accident. Due to the following to antici Union Carbide's management inability of to an this failure of pate emergency magnitude, an effective team crisis management implement to the accident, to and prior effectively inability Union lost sub disseminate Carbide information, For stantial the example, public. credibility with Warren sending Union Carbide a Anderson, the Chair to of the Board of Corporation Bhopal, proved relations error, apparent when public becoming the Indian authorities arrested him and advised him to be

to leave the country for his own safety.179 team should have An effective crisis management been prepared to take the responsibility of discussing man as matters with such stakeholders employees, agers, citizens, creditors, and the media. This team should have consisted of doctors and medical per sonnel prepared for an emergency and public rela to field tions personnel questions by the press. All other employees should be prevented from discussing of the facts their interpretation any surrounding accident. The team would be ready to implement crisis If an effective facilities. temporary hospital team had been created before the management team would the the have of disaster, Bhopal plans a to been implemented prior public rela becoming tions disaster. Union accidents have Carbide at its other minor experienced previously chemical plants180 and should the potential for a greater disaster. A has team would the company know who was to contact in a represented

felony murder charges.174 Union Carbide Corporation magistrate or the Union has no

Anderson, jurisdiction Carbide Corporation.175 on December Four years after the accident 4, a and in of 1984, pathetic powerlessness display was stormed the by demon hostility, Bhopal plant strators

over Warren

most of the rocks,176 Apparendy, throwing demonstrators consisted of survivors of the tragedy who still suffer from the effects of the toxic methyl isocyanate which leaked from storage tanks.177 Not

recognized crisis management to make certain

450 et al. Clayton Trotter positive manner. The combination of errors sur amounts which moral two, three or four times on as much as that

the Bhopal accident made the rounding tragedy com the of the appear worse. Perhaps reputation as not it would have suffered had pany extensively a public developed after its first minor relations accident team crisis management in the United States.

be the grounds of might legally awarded, or natural law. While is not the corporation to pay amounts be in bound those legally damages cause are not awarded in Indian punitive damages courts, the management of the corporation, the best interests of their of representatives should truly make their "highest priority".187 effects of the disaster will to come. as the stock

a In retrospect, Union has Carbide instigated "Chemtrek ? HELP System"181 for use in handling chemical leaks or spills. The system is specifically to Carbide experts to the scene of the designed bring accident, make direct contact, and instigate contain ment and safety operations.182 The tremendous worldwide prove ramifications in to be useful of the Bhopal tragedy may future chemical alleviating

holders, victims The for which

the relief of the disaster be felt worldwide

a corporation, generations Perhaps a is a separate with potentially legal entity infinite existence, could commit itself to the con care and relief of the victims. Union Carbide

tinued could

problems of this magnitude.183 It has been that the government of suggested India hire a "Victim's Advocate"I84 who could help the many victims who have yet to master the lin guistic system. making
claims.185

still turn the "world's worst industrial acci 188 in into the civil lawsuit dent" and largest history and philan greatest example of corporate generosity trophy in history.

and bureaucratic The victims their presence

problems receive would known,

of the Indian of

legal in assistance their and Conclusion an industrial accident and coping with to on the part of all stake requires the will change alternative of holders, ways resolving disputes, to ensure and initiatives victims, compensating future safety is accepted by all stakeholders. Public to motivate activism and government corporate responses to change is also necessary.189 Appropriate are the above considerations for each mandatory to thus each the group, appreciate unique allowing a doubt, the preser situation of the others. Without in any vation of lives should remain a top priority hazardous materials. organization handling laws cir The accident may "serve to strengthen the courts".190 for cumvented Prospects by tougher laws

and filing

pressure precludes to the business needs action, socially responsible in is its that lack of operation Bhopal recognize a social capital and, therefore, represents depleting to restore should be made loss. Attempts profitable better management. operation through in Bhopal is not The only the loss of tragedy of lives, but the loss of any financial thousands to the inhabitants Union Carbide stability brought is the unresolved of Bhopal. The second tragedy lawsuits. regain to it is possible Carbide for Union Yet, as a leader in the its pesticides credibility the reputation of obvious, has been tarnished. However, Union the

in should plant Bhopal competitive re-opened. Where The

be rejuvenated

Preventing

industry. To understate Union Carbide Carbide

could be given a second chance by proving can Union that it be socially responsible. Although financial rewards, it has yet to Carbide has monetary achieve trueprofits in the sense of moral responsibil socially responsible Even ifUnion Carbide pays society.186 entered in Bhopal courts, they for all the judgments to are still in debt Bhopal. morally... From the social responsibility perspective outlined above, A company ity. to in debt... that is not is still

were nil before parctically regulating pesticides in the recent past, India, the Bhopal accident, while Peru and Brazil have imposed industry Malaysia, wide on the petroleum, mining, ical and pharmaceutical industries.191 controls The administration petrochem

increased the testing the law that governs the production chemicals.192 The debate over and use of hazardous Reagan required under was Safety and Health Administration "inten and the Reagan administration reignited, to would laws that sified their efforts get give chemi information about hazardous workers more the Occupational cals they might be exposed to".193 The Bhopal

of the and in the legal arena, the management move to settlement could provide corporation

Union Carbide Bhopal, India and proponents tragedy also strengthened to toughen the Clean Air Act.194 have stressed Experts repeatedly cannot of a proposal that business has created tional resolution

451 a second tragedy, and needs resolution. a interna

social environment escape the complicated must it deci work. The day-to-day within which sions, as well as efforts to plan strategically for the of the future, are totally dependent upon knowledge in social and cultural milieu which the business must States has the ability to handle operate. The United the destruction and freeway caused by earthquakes a to is with such as deal unable yet mishaps, tragedy learned a the Bhopal Carbide accident.195 Union lesson at a great expense. an For the first time in peacetime history, almost entire town was "gassed".196 "No political party, no trade union, no social of any consequ organization ence Union has Carbide Corporation] [including cause with taken up the victims' any degree of are persistence".197 The victims truly poverty stricken, and no with no history of social organization, signif at icant The accident Bhopal has political experience. rather than a national been treated as a local mishap tragedy.198 now that almost four years have Perhaps passed some since the occurrence of the accident, entity, States the United the Indian government, perhaps government, some the parent corporation, of Bhopal and become the call of the second tragedy "the for the party, responsible right thing doing the shareholders and of Bhopal, employees".199 people private Union relief agency, Carbide, will or even answer the

the longer the less likely the victims of the disaster will be able to obtain any to come close to compensat significant recovery202 for the loss of lives and health of the citizens of ing the American" is per and the more Bhopal, "ugly of the lawsuits is postponed, petuated.

issue which

glaring The

Notes

1 2

The Last Lion ? Winston SpencerChurchill ? Visions ofGlory,

W. Manchester, p. 841.

1874-1932,

See Index of Legal Periodicals. For example, The Bhopal incident:how the courtshave faced complex international litigation. Richard Schwadron. 5 Boston University International Law Journal 445?481. Fall '87.Parenspatriae and theUnion Carbide
case: the disaster at Bhopal continues. Lisa Moscati Hawkes. 21

Cornell

International Law Journal 181?200 Winter '88.Can international lawprevent anotherBhopal tragedy? (Leonard v B. Sutton Award Papers) by Todd Howland. 15Denver Journal of International Law and Policy. 301?316 Winter-Spring
'87.

3 4

India seeks arrest of three in blast, Lubbock Avalanche

Nov. 16,1988, p. A-3.

Journal,

Hundreds stormUnion Carbide plant, Lubbock Avalanche

Dec. 4, 1988, p. A-13. between R. Clayton Trotter, private conversations

Journal, 5 From

call

for

congressional

action

one of the authors, with John H. Wood, Jr., U.S. District as while Judge working Judge Wood's Law Clerk (1978? 1980). 6 Union Carbide of India Ltd.: The Bhopal Tragedy, A. and Sharplin reprinted Frederick, Davis and Post, Business and Society-Corporate Strategy, Public Policy, Ethics, 6th Ed, p. 839 (1988).
7 8 Id. p. 767. Supra, Note 6, p. 839.

areas of the law, tax and bribery, primarily States government has felt no restraint in the United to tax the overseas American passing laws earnings of or to prevent of companies, bribery foreign officials In other or members George nation",201 Congress States would not mind of foreign Herbert Walker parties.200 Surely in "kinder and gentler and the President of the United political Bush's

9W.

Stevens, Gas Leak Death Rate Dips; More Hopeful

Seen, NYTimes, Dec. 9, 1984, p. 22, col. 1.

Outlook

10 a D. B. Magraw, The Bhopal Disaster: Structuring Solution, U.

Colo.

out a law requiring working minimum health and safety standards in the opera or tion of owned partially owned wholly foreign a to relieve law and aid operations granting foreign the citizens of Bhopal who were affected by a U.S. based multinational's international operations. The fact that the lawsuits remained unresolved

In Re: Union Carbide Corporation Gas Plant Disaster at 1984; the Plaintiffs in all cases Bhopal, India in December,
. .. except the Union of India v. Union Carbide Corpora

1*

L. Rev.,

Vol.

57, p. 835.

tion, No. 85 Civ. 2696 and except those cases consolidated as shareholders or derivative cases by EXECUTIVE COM MITTEE MEMBERS, STANLEY M. HENSLEY and F. LEE BAILEY, and THE UNION OF INDIA, v. UNION CAR BIDE CORPORATION. 17ELR20580.(2dCir. 809 F. 2d 195; 89 A.L.R Fed. 217; 1986).

et al. 452 Clayton Trotter

12 L. F. Butler, The Bhopal Parens in Transnational Representation Int'l Cal. Western p. 185. LawJ., Tragedy. Forum Non International Mass Tort Litigation: Patriae 46 Supra, Note \3,?. 119.

Crises: 13 S.

Cummings,

Lepkowski, People of India Struggle Toward Appropriate Response toTragedy,C&EN, Feb. 11, 1985, p. 18.
48 49 50 Supra, Note 40. Supra,Note\7,$.4. Id.

47W.

Conveniens and theAdequate Alternative Forum inLight of the

Bhopal Disaster, Ga.

Carbide of India, Ltd., A. Sharplin and reprinted Pearce II and Robinson, Jr, Strategic Management, Strategy Formulation and Implementation, p. 772 (1988).
15 Bhopal, The Guardian, Dec. 15, 84, as reprinted under P.

14 Union

J.

Int'l and Comp.

L., Vol.

16, p.

115.

51

J. Elliot and P. S. Jha, Bhopal,Wd

Supra,Note\7,p.4.

Press Rev, Feb. 1985, p.

54(1). 52
53 A Backlash Is ThreateningChemicalMakers, BsWk, Dec. 24,
1984, p. 60. 54 Note Supra, 17, p. 28.

5. Jha and J. Elliott, Bhopal,Wd

Pg.54,Col. 1.

Press Rev, Feb. 85, Vol. 32,

16 was 'a deliberate act' at Why Carbide says it Bhopal, Chem

1986, p. 9.

Wk,Nov.26,

55

Annual

17 Union Carbide ? Annual Report 1984 "After Bhopal" p. 3. ' 18 Carbide execs:We thinkwe can handle this\ Chem Wk, Jan
1985, pp. 6-7. 5?pra,Notel7,pp.6-18. Id. p. 2. Supra, Id. Id. Id. Id. Note 6, p. 838.

Reports, Union

Carbide Corporation,

1984?

1987. 56 Id.

57 A New Union Carbide is Slowly Starting To Gel, BsWk, Apr.

18, 1988, 58 Id. 59 Supra, 60 Id. 61 Id. 62 Supra, 63 Supra, 64 Id. p. 65 Id. 67 68 p. 69.

2-9, 19 20 21 22 23 24 25

Note

6, p. 845.

Note Note 776.

17, p. 4. 14, pp. 775-776.

26 D.
27 28 29

Colton, India poison toll tops 460, USA Today, Dec 4, 1984, p. 1,4A
Supra, Id. Note 6, p. 838.

66 A Small 49. Whiff ofSabotage,Time, Aug. 25, 1986, p.

%?ra,Notel6. Id. 69 Id. 70 Id. 71 Id. coll. p.9, 72 Note Supra,

30

Id. p. 839.

D. Colton. Gas leak kills hundreds in India, USA Tdy, Dec

14, p. 768. 9. 6, p. 839.

1 6, 1984, p. A. 31 Note Supra, 32 Note Swpra, 33 Note Supra,

66.

73 B.

Crossette, IndonesiansSeek A Carbide Pledge, NY Times,

9, 1984, pg. 22, col. 6. Note 6, p. 845.

34 India hurries to bury 1200 disaster victims,USA Tdy Dec. 6, 35

1984, p. 2A.

Dec. 74 75

Supra,

People of India Struggle Toward Appropriate Response to

C&EN, Feb. 11, 1985, p. 16.

Tragedy,

36 Indians more Bhopal deaths, Lubbock Avalanche fear 1,700

12-A.

Apr. 29, 1988, p. Journal, 37 Note 6, p. 846. Supra,

38

15. Note Supra, 76 %>ra,Notel7,p.5. 77 Americana, Encyclopedia 78 Id. p. 894. 79 Supra,Note\7,p.5. 80 %>ra,NotelO,p.847.

International

Edition,

p. 865.

J. Pearson and L. Helm. ForMultinationals, ItWill Never Be

81
82

/?p. 837.
Supra, Note 14.

Dec. The Same, Bs WK, 24, 1984, p. 57. 39 846. Note 6, p. Supra, 40 As Move T. Gest, K. Sheets, R. Lawyers Taylor,

In on India's

Ramakrishna, The Emergence ofEnvironmental Law in the Law Developing Countries: A Case Study of India, Ecology
Quarterly, 84 Id. pp. 85 Supra, 86 Supra, 87 Id. 88 Id. 89 Supra, 90 Supra, 91 Id. Vol. 993-994. Note Note 10, p. 835. 15. 12, p. 993.

83 K.

26. Tragedy,US Nws &Wld Report, Dec. 24, 1984, p. 41 R. L. Environmental Stein, The Settlement of Disputes:Towards A System ofFlexible Dispute Settlement, Syr. J. Int'l. L. & Com.,
p. 295. 42 Note Supra, 13, p. 113.

43
44 45

Bhopal,Wd
Id.

Press Rev, Mar.

1987, p. 56.
note the firm of Robins,

Note Note

6, p. 844. U, p. 775.

Note 41, p. 296. Also Supra, as mentioned Larson and Zelle, Kaplan

in the footnote.

and Union Carbide Bhopal, India

92 93 94 95 96 97 98 99 Supra, Id. Id. Id. Id. Supra, Id. Note 73, p. 894. 142 Supra,Note26. Note Supra, 144 Id. 145 Note Supra, 143 147

453

126.

Note

57, p. 68.

141.

146Town Proud USA Tdy, Dec. 5, 1984, p. 24. of Industry,

148 149 150 S?/?ra,Notel03,pp.8-9. Id. Id. Id. p. 383. Id. Id. Executive Committee Members, et al v. Union of India

Note 73, p. 894. Supra, 100 Supra,NoteS3. 101 Note 40. S?^w, 102 S?/>ra,Note41,p.296. 103 Davis and Post. Frederick, 104

151 152 Business and ? Society Cor 153

porate Strategy, Public Policy, Ethics, 6th Ed, p. 8 (1988).

Id. p. 1. Id. Id. Id. p. 442. Id. Id. p. 441. 105 106 107 108 109

Carbide Corporation; Union of India v. Union Carbide Corporation, et al, 108 S. Ct. 199; 98 L. Ed. 2d. 150 and Union (1987). 154 See Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947), Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981). See also Black's
Law Dictionary, 155 Supra,Note 156 Id. 157 Id. p. 589. 41, p. 296.

11 o
m 112 1,3 114 115 1,6 1'7

Negandhi,
Id. Supra, Supra, Supra, Note Note Note

International Management, p. 159(1987).

Sw/?ra,Notel7,p.4.

158 Indian
103, p. 470. IS. Journal, 159 Id. 160 Id.

judge removed inBhopal case,Lubbock Avalanche

16, 1988.

Oct.

30.

S^ra,Note43. Note S?/?ra, 118 Id. p. 166. 1,9 Note Supra, 120 %>ra,Note26.

13, p.

120 and footnotes.

Order of Judge Seth, Apr. 29, 1988. Copy citation provided by Union Carbide Croporation
sion of authors. Available 162 Id. 163 See Prosser generally 1984. 534 etseq, 164 Id. p. 535. upon request.

61

excluding in posses

30.

and Keeton

on Torts,

5th Edition,

121Pesticide makers begin to adapt inBhopaVswake, Chem Wk,

8. Jan. 23, 1985, p. 122 Id. 123 Note 26. Sw/?ra, 124 34. Note %>ra, 125 Sw/>ra,Notel6,p.8. 127 St^ra, Note 43.

p.

Fletcher v. Rylands, 3H & C 774, 159 Eng. Rep. 737 (1865). 166 For a discussion of different types of abnormal activity,
see Prosser and Keeton on Torts, p. 546. Supra, Note 36, at

165

126 M. Cherniack, The Hawk's Nest

Incident, p. 109 (1986).

537, 167

and Prosser's Susquehanna

footnotes. Fertilizer Co. v. Malone, 73 Md. 268, 20 A.

138A. Pollack, Chemical Used At Indian Plant Was Not Vital,

Dec. NY Times, 139 Note Supra, 140 Note Supra, 141 D. L. Wilcox, 9,1984, 53. 35, p. 18. W. K. Agee, Public Relations p. 8.

128 %>ra,Notel03,p.478. 129 Id. 130 Id. p. 466. 131 Id. 132 121. Note Supra, 133 Id. 134 Sw/?ra,Note55. 135 Note 57, p. 68. Supra, 136 Id. 137 %>ra,Note55.

900 (1890), Frost v. Berkeley Phosphate Co., 42 S.C. 402, 20 SJB.280 (1894);Holman v. Athens Empire Laundry Co., 149 Ga. 345, 100 SR 207 (1919). 168Restatement (Second) of Torts, Sections 519, 520 (1965).
169

170Baker v. Snell, 2 KB. 852, 825 (1908).

171 10, pp. 173 %>ra,Notel03,p.36. 174 Supra,Note3. 175 Id. 176 4. Note Supra, 177 Id. 178 Id. 179 %>ra,Notel03,p.383. 180 126. Supra, Note 172 Supra, Note Supra, Note 161. 840-843.

Supra, Note

166.

P. H. Ault,

Strategies and Tactics, p. 386 (1986).

454 et al. Clayton Trotter

181 182 183 184 185 186 5?^ra,Note41,p.296. Id. G. E. Sawyer, Business and Society: Managing Corporate 5wpa,Notel7,p.5. Id. Id.

201 The
license"

authors
with respect

take "judicial notice"

to a well known campaign

and/or
quote

"poetic
attrib

uted to a presidential campaign speech of George Herbert Walker Bush, the 44th President of theUnited States. 202 On February 15, 1989 the government of India reached
a "settlement" with Union Carbide that was ordered by the

Social Impact (Boston: Houghton Mifflin,

187 188 Supra, Note Sw/?ra, Note 141. 43.

1979), p. 401.

Shrivastava, Bhopal: Anatomy of a Crisis (1987). Book Reviews May 22, 1987, p. 979.
and R. Gibb, The states' J. Schwarta lukewarm response to Chem Wk, Feb. 20, 1985, p. 26. Bhopal, 191 100, p. 40. Supra, Note 190 L. Rich, S. Malone,

189P.

Supreme Court of India for 470 million dollars or about $1500 per person injured or killed in the accident. The government of India has assumed responsibility for adminis tering the claims of the injured and families of the dead. Even at the rate of 1per hour itwill take years to handle the claims of 300000
settlement may be

people. There
overturned or

is some possibility
unraveled. At least

the
one

192 Ciffeli, A., An Explosion in Congress, Fortune Vol. VIII,

1985.

judge has threatened towithdraw his support for the order. SeeWall Street Journal, Wed. Feb. 15, 1989 and Lubbock
Avalanche serves the call to Journal, Sat. March second action 4, 1989. So of little, the emphasize for Congressional tragedy Bhopal the even more so late, only and make compelling.

p. 53. Jan 7, 193 Id. 194 Id. 195 L. Rich,

S. Malone,

J. Schwarta Wk, Feb. 20,

and R. Gibb, 1985, p. 26.

Three

ambi

200 G. C.Johnson, R. C. Trotter andM. S. Gately, The Foreign

Corrupt Practices Act: Interpretation and Compliance, Prentice

tious state studies, Chem 196 35. Supra, Note 197 Supra,Note43. 198 Id. 199 146. Supra, Note

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1985.